How do we begin to revive the border region economy?

On 8 March the NI Deputy First Minister Martin McGuinness will launch the sixth edition of the Centre’s annual research publication, The Journal of Cross Border Studies in Ireland. One of the most interesting articles featured in it is by two eminent economists, Dr John Bradley and Professor Michael Best, on the difficulties and opportunities facing those with the onerous task of promoting the revival of the border region economy: that is the economies of the six Southern counties (including Sligo) and the seven Northern local council districts which adjoin the border.

The authors bring to Irish border research a wealth of international experience: John Bradley for his work on the operation of the Structural Funds and the barriers facing the post-Communist economies of Central and Eastern Europe, and Michael Best on regional business strategies around the world. He is also the author of two seminal books on how businesses and production processes have evolved over the past century.

The article gives a foretaste of a research project commissioned by the Centre and funded by the Special EU Programmes Body under the INTERREG IVA programme, which will be completed at the end of this year. Central elements of this research involve a regional manufacturing overview, a study of apparent ‘clusters’ of firms involved in related activities, and an in-depth study of specific small towns in the region. The clusters are of technology-based firms in the more advanced eastern border region; clothing and seafood processing in the north-west; and furniture and food processing in the mid-border region.

The authors begin by sketching the wider political and economic background to the Irish border region and its economy: the excessive optimism of the immediate post-Belfast Agreement period, with largely disappointed hopes that foreign investment would flow back into Northern  Ireland and the Southern border region after 30 years of conflict; the enduring and even increasing polarisation of communities in the North; and then the spectacular financial and economic crash of the post-2007 period, with GDP  and investment in 2009 falling by 7.5% and 31% respectively in the Republic of Ireland, and by 5% and 15% in the UK.

In undertaking this research, Bradley and Best took the unusual step – for economists, who tend to be obsessed by numbers – of actually exploring the border region themselves and interviewing regional industrial promotion officials, local chambers of commerce and individual factory owners and managers. They found that the border featured far less as a problem to firms located in the region than they had anticipated. ‘Once a firm had identified the island as its target market, and made determined and sustained efforts to build that market, then the benefits of serving a  potential of six million consumers became available.’ They give the example of Crossgar Food Services, whose vans are able to leave their plant just north of Downpatrick late at night and make deliveries as far south as Cork by 5 am the next morning.

They found that successful internationally trading firms were to be found in deeply rural border areas. They cite the example of Walter Watson near Castlewellan in County Down, a family firm which has grown from a blacksmith’s shop 50 years ago to a dynamic company employing 180 people making agricultural machinery, overhead cranes and structural and reinforcing steel. In a company like this, the leadership is by independently-inclined individuals who do not use debt finance, but grow their firms ‘organically’ via reinvested  profits, and whose emphasis is on fostering and sustaining their mainly local labour force. If such old fashioned qualities had been more widespread in recent years, perhaps Ireland would now be facing into a brighter future!

These border-based entrepreneurs have a long time horizon: they have lived through the hard times of the Northern Ireland ‘troubles’ and the current recession (which they rarely if ever mention), and they are firmly focused on building their companies’ resilience for the future. As Bradley and Best observe: ‘When run by exceptional people, firms in the border region can excel. But there are too few of them. How can their numbers be increased?’

The authors then comment on the surprising brevity with which county development plans in the Southern border region treat the local manufacturing base, and their tendency ‘to take for granted the role played by individual business enterprises or geographical clusters of similar enterprises.’ They suggest a radical rethink of cross-border institutions in the business support and development area so that the ‘island market place’ focus of InterTradeIreland is complemented by initiatives which concentrate on the specific needs of the peripheral and divided border region. ‘Until we bring ourselves to address this historical legacy of distortion and disadvantage openly, honestly and effectively, the border economy will continue to be isolated from mainstream island life and its development potential will remain unrealised’, they conclude.

Andy Pollak

P.S. A number of readers of last month’s ‘Note’ comparing the Northern and Southern health systems have pointed to my lack of mention of comparative health outcomes in the two jurisdictions. They point to the dramatic decline in death rates for people over 65 in the Republic of Ireland in the first five years of the century (over 26% from all causes), with even more striking decreases in the incidence of heart disease and strokes. Infant mortality is another area where the Republic has improved at a greater rate than the rest of the EU, including the UK. The difficulty is that international statistics do not record separate figures for Northern Ireland, and there is a surprising lack of any research comparing health outcome data in the two Irish jurisdictions. I will try to research this topic a little more and return to it in a future column. In the meantime, if any reader can point me towards any reliable and accessible North-South data in this complex area, I would be grateful.

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